tv Bloomberg West Bloomberg August 26, 2014 6:00pm-7:01pm EDT
to all of these consumer centric tech deals. to what made them profitable and successful. ass is kleiner bidding up much as it is snapchat's dominance. these are gigantic numbers and they probably justify something in this neighborhood. it takes two to make this deal work. this is something that will continue to follow. snapchat famously turning down that offer from mark zuckerberg. paul kedrosky, are bloomberg contributing editor. up next. special, "the
♪ >> welcome back to "bloomberg west." "a way youecial, watch" focusing on the media and the evolution of what, how, you watch it. become a hoping to bigger player in the streaming business buying switch tv for one billion dollars. they are a powerful media platform with 55 million viewers watching expert gamers play titles like "league of legends." we spoke to a partner who led an early investment in twitch and is on the companies board. i started by asking if this could -- if twitch could be the
next espn. >> this is not some fringe activity that people do in their basement. this is something we all do. think of your teenage years sitting around the living room watching friends played the new games or even earlier than that, watching people play together. what they have done is taking the experience and brought that to the internet. it is not so out of the mainstream. happening.and it is >> why is amazon buying this? >> they are making a huge bet on video. with amazon studios in l.a., they are making a dozen dramas and comedies. they just greenlight five new kids pilots. they are spending on licensing content. twitch tv becomes another channel in the lineup. >> we have seen some numbers in
extrapolation of four and a half hours per month per user. i have read that a lot of the users, 50 eight percent spend as much as 20 hours a week. are those kind of numbers right and what does it mean? >> there are a lot of users that spend a lot of time watching video game content. if you think about it, it is not so different than what we all do what we watch the world cup. we want to watch great people play games. >> and game players learn tricks from other game players. from a media standpoint, is what is really curious. >> there is tons of entertainment and learning value and also marketing value. for the entertainers to show this is what these games do. that.s what taps into >> who are the people posting the content, how did twitch recruit them? >> they have diverse broadcasters that stream.
the best in the world to someone who has a funny in attaining show around a particular type of content. you have a million different broadcasters broadcasting on twitch. >> a lot of the revenue comes through the dedicated players to belong to a certain stream. when you look at amazon's other plans to monetize content because a lot of the work has ,eally about selling stuff using streaming to sell stuff. where does this fit with a different model? >> we know they are building a huge business right now. au marketers say it will be $1 billion business in 2014. e-marketers say it will be a $1 billion business in 2014. the thing you notice when you have these devices it is not
there because amazon does not use google services. it kindtwitch tv brings of up to speed partially in the user-generated space. it gives people another reason amazon.p >> is hard to name one of them but the other shows that they are buying, if it is a show that i want to watch, i will find it. who has the power? is it the content creators, is it these upstarts? twitch has only been around for three years. >> you tap into a community. they create all of this content, you very quickly have the power. something that jeff bezos said around wine they were making this acquisition is that they want to learn how to do that. i think they want to understand, they are keeping twitch as an independent company.
>> broadcasting and watching gameplay is a global phenomenon and twitch is a content that brings together tens of millions of people who watch billions of minutes a games every month. company really a just to get the engineering talent. has amazon done that? >> not as much. they have a build it here for you. they made a lot of mistakes in the late 90's. , we're just seeing that. it is so hamstrung in trying to make acquisitions. they are under the microscope. >> didn't they try to buy twitch and it didn't work out? >> i cannot comment on any particular rumors. they built something very special. i think a lot of people took notice of that. >> do you think that google right now is more hamstrung
because of antitrust concerns than they were even a year ago? >> that is hard to say. corporate priorities are probably more hamstrung than any particular revelatory concern. where they want to spend their energy. >> how are they reacting to this acquisition? a lot of people are passionate about this network and whether it remains the same. >> and has been very positive and that is something that they took great care and how this was gone about. we saw in the townhome, he said, we are keeping twitch independent. the same office, the same team, the same policies with respect to broadcasters. >> it was interesting to see complaints about google not being able to get the deal done. certaine brought elements of that, i wonder if that will decline. >> i think they like it as an alternative and amazon is committed.
>> as you mentioned, amazon gaming studios. what is happening in the rest of amazon gaming studios? >> they are trying to build a gaming function. they're developing some of their own apps, they are hiring. i don't if this has said it is a huge corporate priority in the same level as video. obviously, this gives them another access to gaming. >> congratulations. thank you so much for joining us. up next, netflix gets shut out of the major emmy categories but it is still the hottest topic and a rising threat to networks like hbo. we look at how hbo is fighting back when the special edition of bloomberg west, "the way you watch" returns.
>> today we have a special show we are calling "the way you watch" focusing on the way we watch media and the rapid à la pollution of television. -- said that the nbc said that the show drew in good numbers. a were booted to a monday night in office. -- they were booted on monday night. one that was not a winner was netflix. andid pick up seven creative arts emmys. it was a contender for best comedy but "modern family" ended up winning for a fifth straight year. "house of cards" failed to take home an award.
" taking home best drama and best actor. hbo 119 emmys including an award "veep." there was a make out session louis dreyfus and bryan cranston. they appeared together on an "seinfeld." what is timeion, warner doing to make hbo more accessible to its viewers? scarlet fu checking it out. so, what do you make of how the awards program down? it was a lot of talk about netflix. >> they played the disruptor role. says,, it isminee
an honor just to be nominated. when it comes to hbo, it is certainly time warner's crown jewel. they haveook at how done compared to netflix. netflix top them in subscription revenue after topping it in u.s. subscription numbers a few quarters prior. netflix and booking $1.5 billion in streaming revenue. hbo is still much more profitable, more than seven times profitable. youre goal here is to get growth rate back up, hbo needs to adjust with the times, specially since time warner made clear that he does not want to be acquired by foxx. >> the big question is what is ado about the cord cutters. the latest episode of the hbo shows like "game of thrones" but
they cannot because they are not available on streaming services. >> we are talking about legal options where people are not stuck paying $200 a month. the cheaper options allow you to link up with a cable tv provider which includes high-speed internet access or limited television plus hbo. out are some of the options there. at&t charges a $99 installation fee, there is a contract. the package pricing is only good for one year. price could go up anytime. the challenge turned out to be that it means to attract new customers and then want to attract some of the customers who do not currently subscribed to cable tv. this pushes them towards the cheaper options.
>> cheaper or even free. "game of thrones" is the most pirated show in the world, i believe. we do have some standalone offerings. us? can you tell >> in countries like sweden, denmark. they began offering this all the cart option around the same time that netflix expanded. it cost about $12-$13 a month according to analysts at barclays. it has led to an increase to subscriptions. the threat of cannibalization has not played out in those countries. we know that hbo has teamed up with amazon to make some shows like the sopranos, the wire available to amazon prime streaming customers. that might be a model in the coming weeks and years. >> scarlet fu, thank you so much.
>> welcome back to "bloomberg west." back to our special show, "the way you watch" focusing on the future of media and the rapid evolution of how, where, and what we watch. the enemies were held in l.a. ys were held in l.a. >> it is like network tv holding an awards show and giving all of and towards to hbo netflix. >> our editor at large is back with us and joining us from
l.a., the ceo of an independent multi platform studio that develops scripted series for tv and digital. does it matter that netflix didn't win any of the most misty just awards? -- didn't win any of the most prestigious awards? present. were very -- >> they were very present. they were mentioned, they were called out, they were featured. don't forget, a lot of people are going to go over to netflix to watch the back episodes of "breaking bad" that was so heavily featured during the telecast as well. >> mtv has a video awards show and they don't show music videos. video at this twitch acquisition on the same day and i wonder what, if the future of
content isn't about different distribution methods and different kinds of content and of hollywood might be left holding the bag. >> i think that the enemies of focus on broadcast for comedy. -- emmys focus on broadcast for comedy. maybe, twitch, they spent almost a billion dollars on it, that it will be the place for people to watch. shows oninteresting, broadcast networks did well as well but there is such a set formula. julianna margulies won the award and remind us there are 22
episodes a year. what can they do that the broadcast networks cannot do to make the shows better? >> really started with hbo and their ability to have certain language and violence and other in thef element programming that you could not have on podcast. >> are you saying it is all about sex and violence? >> and language. also serialized programming. netflix, the straight to series model allows the creators and producers to think about the show in its entirety and in some cases they are able to produce the entire show like a movie. they think about it as one full story. that benefits them. this gives a different time horizon. >> i wonder if netflix will bern and maybe amazon might learning now how difficult the businesses. they had such great success with their first two out-of-the-box, with --
some was not, they had that did not work. >> when you don't see those awards show up, we don't know the results they get from the subscriber addition. could a couple of failures by netflix really in peril the whole business or at least netflix's part in it? handler's show -- chelseahe handler show moving. hbo has movies, they have dramas, to have comedies. they are in all of the categories which is what part of what leads to such a strong representation of hbo and the emmys. i start to think you will see amazon. >> i wonder if netflix can sustain these hits. we are into the third season of house of cards, the second
season of "orange is the new black postcode and critics say that the later seasons have lost omentum -- " andge is the new black critics say the later seasons have lost momentum. types of look at the shows that they have in development, they just launched their first animated series that has been well received. this is really still maybe not the first inning. maybe this is the second inning for them. amazon is just getting into the game. i can tell you from the creative community in hollywood, people really want to work with netflix and that drives a lot of great product and development. people want to be there and they want to work with netflix. i will have access to the best shows out there a long with hbo and the other premium cable networks. >> whether it is netflix, hbo,
cbs, whatever, what is the impact of all of this spending and content in l.a. right now? >> it is a great time to be a studio and an owner of content because there has never been more buyers for programming. the biggest scarcity is actually in the writing talent and in the show runners. the environment in hollywood right now is very positive because there are lots of places to sell shows and the budgets are going up. of shout outs to writers. >> we can write. >> thank you so much. one airbnb landlord found out the very hard way what can go wrong on the home sharing site. we will ask her what happened.
stay. she had to hire an attorney. "the event working hard to provide this user with support. -- earlier, cory johnson and i spoke with corrie herself and i started asking her what actually happened. completerted out as a nightmare. i have a small condo that i use as a vacation rental. when i am not using it, i let family and friends use it. i rented out to people on airbnb that wanted a short vacation. these individuals wanted a six week stay, they said they were going to be working on a work project. they are videogame developers. it was two brothers. i thought, ok, six weeks, we can do that. very long story short, they
ended up paying for the first 30 days of the reservation and then we went not able to process payment any further. days, they claim squatters rights, essentially under california law question mark they were legal and allowed to be there as tenants and if you wanted to get rid of them, you had to evict them. >> well, they reportedly came from austin, texas and they were taking advantage of the state of california law which states that once a tenant is in a property, whether it is a short term , once they had 30 days, they trigger tenants rights. >> did you know about that? a lot of my critics who are professional landlords, they said, how did you not know this? hosts foro other people that do airbnb and they
do more of a temporary vacation rental for the second home. they were surprised. they said, that could have happened to me, i had no idea. they predatory, they apparently are accused of taking some money from kickstarter and now starting the project. i presume they are probably looking for their next scam. what do you do when you look at the people that you might rent to and how might you do that? >> that is a really good question. i feel like this is a cautionary tale and i have learned a lot. lots of of the people are learning permit. if someone is going to be more of long-term rental, to do more check, like a background credit check. >> this got kind of ugly. he gave us some text messages, you told them that there power was going to be shut off.
a write back saying that they have spoken with their attorney and they're going to press charges for lack of mail and damages caused by your malicious misconduct. what did airbnb do about this? >> they responded pretty quickly. it sounds like everything is taking a long time. this goes through the legal process of lawful detainer. you're not mad at airbnb? >> no, not at all. i love the service. >> do you think they should have given you more information about this 30 day issue or more warning? >> i think it is an emerging happening and i think that they are figuring it out. as a result of my situation, they have tightened up their customer service, policies, percy just. maybe the next post that gets this rental will get a pop-up
warning. itthey hired a 24-hour live investigation service to camp outside of the condo and somehow catch these guys as they were going in and out. >> in the beginning, when we had just realized that the squatters were not going to leave, their intention was to pay for 30 days freery to ride out rent. airbnb was trying to contact them through their cell phone, their e-mail. ever offers they could to try to draw them out. like i said, once the 30 days were up, -- >> so, they were not sticking out the house or you are unsure? >> i am unsure. kind of what was happening was a combination of things. my dad is my property manager. he was locally -- the neighbors were staking it out. just trying to monitor, are they
still there? >> maybe they did not hire professional investigators to actually monitor the property. i wonder what this means for their business model. they have attracted a huge valuation as they have added over 550,000 rooms. there is a presumption that they continue to do this without trouble. what we see in new york city where there are certain buildings that the government might be getting involved about this. there are renters laws like in california. these are big issues. what do you think it means for the future of airbnb? is there growth limitless? >> it is an emerging industry. i think it will continue to grow. people who might see this whole media explosion as a bad thing. i see it as probably good. for example, i have relatives who live in smaller markets or maybe like the baby boomer
generation and are asking, what is this airbnb? you can use it to stay an apartment in paris, that is really cool. we live in a big metro city. >> ultimately, these guys nobody saw them leave. they did not pay. have you been compensated at all? >> they did, yes. >> how did they compensate you? >> they took care of all of my out-of-pocket expenses. >> did they pay you for mixed rent? >> i'm not comfortable speaking about the details but i did have to hire an attorney to take care of unlawful detainer. that is just the way it works. >> what are you going to do it this condo? are you renting it out on airbnb again? that is a great question. i was just down there a few days ago like to do the reclaiming of
the condo. when i have friends or families around, it is fine. i did feel that creepy sensation come over me, emotionally unsettled. >> what are you going to do? other people,rom they said, wait a month. let everyone settle and calm down. can make a decision. do you want to keep renting it, put it on the market? in palm springs, like you had mentioned, airbnb in new york, or here. in palm springs, they are organized and they make it pretty easy for people to pay taxes. you apply for a permit, it is totally legit to have like a occasion condo down there. you write them a check and it is all good. maybe other markets will adapt. >> we will be right back.
to "bloombergk west." hasago mayor rahm emanuel vowed to double down on his cities tech sector by recruiting both talent and companies. this was when he was elected back in 2011. how is he fulfilling that promise? upon second city compete with the likes of silicon valley? sam grobart sat down with mayor emanuel.
first, they had a fun talk. " house of cards" or "veep?" cards."e of cubs, white sox. >> don't do that, it is chicago. >> are you a deep dish guy or a thin crust guy? >> deep dish. with my hands. ask iphone or to android. >> no. we have motorola. >> of course you do. >> bloomberg's sam grobart with chicago mayor rahm emanuel. be sure to tune into "bloomberg west" tomorrow.
we will have more information on the network the city of chicago is installing. time for the bwest byte when we focus on one number that tells us a whole lot. $21.95. $421 and $.95, a customer acquired the very latest in technological innovation. it is called the knee defender. he installed the device to keep the woman in front of him from reclining her seat. there were arguments, there were incidents and then the woman through her drink at the knee defender passenger. they made an emergency stop and kick them both off of the plane. when you get on a plane, you know you're going to be crushed. foot five, sometimes
i am on flights. sometimes they throw their seat back quickly and they take the armrest. they steal the armrest. >> everyone steals my armrest. >> that is not right. the knee defender, it is fine, whatever. a need for a drink defender. the faa says you cannot use it during takeoff and landing. i think it shows that united airlines is trying to cram too many people on flights if they feel this is necessary. need a travelers i think little bit of extra pampering. >> you would not need to go back. no?
♪ >> welcome to "money clip," where we tie together the best stories and video in business i am olivia sterns come in today for adam johnson. here is the rundown. in tech among hello as a new -- intech, paolo has a new shirt. businesses heading up north to avoid taxes. is canada the new hotspot for inversion? julia louis dreyfus gets a wet one from the star of breaking bad. flying cars seem like a an